LEADING dissident Bao Tong has been transferred to a hospital for treatment but friends and relatives are losing hope for an early release. An informed source said the family of Bao, the principal secretary of ousted party chief Zhao Ziyang, had petitioned the Ministry of Public Security and the Justice Ministry for permission to see his doctors. The source said although he was admitted to hospital in Beijing last month, it was not an indication that the senior member of the Communist Party's liberal faction would be granted ''parole for medical treatment''. The news came despite hints by Chinese officials that in return for unconditional Most Favoured Nation (MFN) status from Washington, Beijing might grant ''medical bail'' to a number of dissidents in April and May. A source close to the family said Bao, the former political secretary of the Politburo who is serving the second half of his seven-year jail term for alleged offences including ''leaking state secrets'', had recently undergone treatment for a serious thyroid gland complaint. ''Six tiny tumours have been detected in his thyroid glands by doctors in the downtown hospital to which he was transferred from Qincheng Prison,'' the source said. ''The doctors told Bao the tumours do not appear to be malignant but a further period of observation is warranted. No plans for surgical removal of the tumours have been made.'' The source said it was unlikely Bao would be moved back to Qincheng, which is in the outskirts of Beijing, in the near future. It is understood, however, that relatives had expressed dissatisfaction about the ''inadequate medical attention'' Bao was given. They feared that since a few tumours had shown signs of fusion, the abnormal growths might be a symptom of cancer. Moreover, according to a relative, Bao's face was swollen and he could no longer speak clearly because of problems with his vocal cords. He added that immediately before he was taken into hospital, Bao was in severe pain suffering from inflammation of shoulder joints. The relative added that while medical facilities, food, and general living conditions were slightly better in the hospital than in Qincheng, Bao's overall physical condition continued to deteriorate. Sources in the dissident community in Beijing said in view of China's confidence in securing MFN, it was unlikely the authorities would grant medical bail to high-profile prisoners of conscience including Bao. Meanwhile, the authorities have stepped up surveillance of dissidents suspected of organising protest activities in the run-up to the fifth anniversary of the Tiananmen Square massacre in June. For example, relatives said Liu Nianchun, a labour activist who organised a petition for improvement in workers' rights in the spring, had been under virtual house arrest since last month.